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U.S. Takes Steps to Make Corporate Inversions More Difficult

U.S. makes it more difficult to invert to third countries

The U.S. strengthened efforts to discourage corporate inversions by making the deals more difficult and limiting the benefits of transactions in which American companies take foreign addresses to cut their tax liabilities.

Some of the actions announced Thursday by the Treasury Department will impact transactions that close today or after, whereas others apply retroactively to those completed after September 2014.

Corporate inversions -- deals where U.S. companies take foreign addresses and cut their tax rates -- became a political flash point last year, though the rhetoric has since cooled. The latest possible transaction is Pfizer Inc.’s potential $150 billion acquisition of Allergan Plc, which would be the drug industry’s biggest deal ever.

“These actions further reduce the benefits of an inversion and make these
transactions even more difficult to achieve,” Treasury Secretary Jacob J. Lew said on a conference call with reporters Thursday. “This is an important step, but it is not the end of our work. We...